A Chinese clerk counts renminbi yuan banknotes in Nantong, East China's Jiangsu province. [Photo/IC]
China will optimize the assessment systems of State-owned insurance companies and the national social security fund to increase their investments in the A-share market, as part of the country’s latest plan to attract more long-term capital for market stability.
The office of the Central Financial Commission and the China Securities Regulatory Commission, along with other departments, has recently issued the implementation plan for promoting the entry of medium and long-term capital into the stock market, the CSRC said on Wednesday.
Encouraged to boost their investment scale and proportion in A-shares, including via equity funds, large State-owned insurance companies will be subject to long-term performance assessment with a cycle of more than three years, according to the plan.
Specifically, the weight of the annual assessment of their net asset return ratios will be no more than 30 percent, and the weight of the three-year to five-year indicators will be no less than 60 percent.
The plan also entails steadily increasing the stock asset investment proportion of the national social security fund and further expanding the entrusted investment scale of the basic pension fund in eligible regions.
Specific long-term performance assessment mechanisms that span over five years for the national social security fund and over three years for the basic pension fund will be clarified, supporting the National Council for Social Security Fund in leveraging its professional investment expertise.
Furthermore, efforts will be made to introduce a guideline for over three-year performance assessments of enterprise annuity funds and expand the coverage of enterprise annuities. Listed companies will be encouraged to intensify share buybacks and implement multiple dividend payouts within a year.
The measures, the CSRC said, are focused on guiding commercial insurers, the national social security fund, the basic pension fund, enterprise annuity funds, mutual funds and other long-term capital to further increase their presence in the stock market.
